“Illicit retail” is the forum through which stolen goods are offered for sale. There is a significant resale market for certain types of goods, and theft of these items occurs throughout the manufacture, supply and retail chains as well as at retail and wholesale stores. Attractive goods for large-scale theft and resale include valuable, branded goods, which are available, removable and disposable. These goods can be stolen and sold on in an illicit market with relative ease and with little or no chance of the goods being identified as stolen or of establishing who the lawful owners of the goods are. Consequently, bulk theft of goods for resale has come to account for a significant proportion of retail theft and theft from other commercial organizations.
Theft of retail products impacts upon the profitability of retailers and their suppliers. Consequences of retail theft include the cost of replacing stolen products, administration costs and loss of sales (through reduced in-store availability, concern over stocking high loss rate products and the satisfaction of a proportion of market demand from illicit sources).
Existing theft deterrent devices, such as Electronic Article Surveillance (EAS) tags, are applied to products late in the supply chain and are only functional within the authorized retailer's shop environment, therefore offering no protection within the supply chain. Also, once a product has been stolen, the device attached thereto ceases to have any effect and indeed can actually add credibility and value to the stolen merchandise.
Recent British Home Office reports have advocated a new approach to tackling the problem of illicit retail, entitled the “Market Reduction Approach” (M Sutton, J Schneider, S Hetherington (2001) “Tackling Theft with the Market Reduction Approach”, Home Office, Crime Reduction Research Series Paper 8). The approach is based on the idea that markets for stolen goods are not just a downstream consequence of theft but are the underlying motivational force for such offending. It is desirable to reduce the saleability and resale value of stolen goods in order to reduce the rewards available to those who deal in them. It is also desirable to increase and extend the risks of capture for those who deal in stolen goods. By removing the rewards available and increasing the risks associated with dealing in stolen goods, the primary motivation for retail theft is substantially removed.
An integral figure in the process of illicit retail is the “innocent consumer”. Many people simply do not think to question the provenance of cheap goods from, for example, a market stall, car boot sale or indeed an established retail outlet. Of those who do, the majority of people are willing to turn a blind eye in the face of goods sold cheaper than at primary retail outlets. Removing the excuse of consumer ignorance is key to reducing the number of people prepared to buy stolen goods, and hence to reducing the resale value and opportunity for disposal of stolen merchandise.
The other key figures in the process are the thief and the handler. Research suggests that the majority of offenders have no fear of being arrested while handling or selling stolen goods, because the perceived risks are slight with numerous “safe” outlets for the stolen property and little or no chance of the stolen property being identified. It is therefore necessary to increase the risks of buying, handling and consuming stolen goods, and to ensure that these greater risks are fully appreciated by all involved.
A similar problem to that of preventing the sale of stolen goods is the problem of preventing the resale of illegally imported goods or “Grey Imports”, sometimes known as ‘Parallel Trading’. The pharmaceutical industry, for example, comprises large companies that sell the same or similar products in many countries. The practice of buying goods cheaply in one country and illegally importing those goods for resale in another country, or of purchasing goods for export but not actually shipping them, is well known and is a source of considerable loss of revenue for many manufacturers and for the Government in lost taxes. It is therefore desirable to reduce the ease with which such illegally imported goods can be resold.
Another related problem faced by many retailers is that of returns fraud, for example where goods have been stolen from one store and returned to a different store or retailer. Establishing that a product is genuinely purchased from the store where it is being returned, and that it is genuinely unopened and therefore suitable for return, can pose significant difficulties. This problem is highly evident in the sale of audiovisual media, such as CDs and DVDs, which are regularly purchased, illegally copied and returned to the retailer.
In this specification, the following terms have the meanings outlined below:
A point of sale is any outlet at which a product may legitimately be sold.
A channel of sale is the route by which a product reaches the market.
The term “product” encompasses an article to be sold and/or the packaging in which it is presented.
A “call to action” includes any request, inducement, encouragement or recommendation that a specific action is taken.